Qualitas $1 billion fund boosts sustainable build-to-rent market
Boosting clean, green rental housing
Real estate investment management firm Qualitas has created Australia’s first property debt fund to elevate minimum sustainability criteria into its investment criteria. The Qualitas Build-to-Rent Impact Fund is also Australia’s first dedicated build-to-rent debt platform.
Qualitas is determined to accelerate Australia’s transition to a low carbon economy and the green overlay of the fund will help reduce emissions generated by residential housing.Tim JohansenGlobal Head of Capital, Qualitas
The CEFC made a cornerstone commitment of up to $125 million to the Qualitas Build-to-Rent Impact Fund (QBIF) which will finance housing that meets strong sustainability standards and reduces greenhouse gas emissions by at least 35 per cent compared with the current building code.
To qualify for QBIF finance, projects must demonstrate minimum sustainability standards, including an average NatHERS rating of seven stars and a 5 Star NABERS for Apartments Energy rating, as well as criteria for appliances and solar generation on the available roof area.
Buildings account for more than 50 per of Australia’s electricity use and almost a quarter of carbon emissions, with residential property driving about half those emissions. Build-to-Rent (BTR) is a well-established asset class in the US and Europe. The CEFC support for QBIF is a significant opportunity to contribute to a low emissions foundation for an emerging market sector in Australia and is aimed at boosting clean, green rental stock and extending the benefits of clean energy to Australian renters.
From an investor’s perspective, BTR provides significant benefits within real estate and credit portfolios, including low volatility, low correlation to other asset classes, and a diversified credit risk due to a large tenant base. Accessing the asset class through secured debt also provides structural protection for investors seeking consistent income in a low-rate world.